EU-OECD Project on Promoting Economic Resilience in Yemen
Phase I: 2020-2024
Phase II: 2024-2028
Years of protracted conflict and economic fragmentation have devastated Yemen’s economy, eroded institutions, and increased poverty and vulnerability. Over 80% of Yemenis live below the poverty line. Against this backdrop, the EU-OECD Project on Promoting Economic Resilience in Yemen launched in 2020 to support the country’s path toward recovery through three pillars:
1. Resilient Economic Institutions
2. Public-Private Dialogue
3. Donor Coordination
Strengthening Economic Institutions
At the heart of Yemen’s recovery lies the capacity of its economic institutions to perform core functions, even amid fragility and crisis. The EU-OECD Project on Promoting Economic Resilience in Yemen has worked closely with central institutions to reinforce the foundations of economic governance, enabling the state to deliver essential services, manage public resources effectively, and restore confidence in the financial system. By combining technical assistance, international best practices, and tailored capacity-building, the project has helped Yemen take concrete steps toward restoring institutional credibility and advancing long-term economic stability. The following areas illustrate where key impacts have already materialised.
Macroeconomic Reform
Ensuring the effective functioning of key economic institutions lies at the heart of promoting economic resilience in Yemen. To this end, the project has focused on three vital areas: strengthening fiscal governance, improving the performance of network industries such as electricity and telecommunications, and enhancing public service delivery. The Economic Recovery Plan is now being used by the Internationally Recognised Government to shape priority interventions supporting economic stability in the short to medium-term.
Financial Inclusion
To address a longstanding data gap in Yemen, the OECD conducted the country’s first-ever national survey on financial literacy and inclusion, in partnership with the Central Bank of Yemen (CBY-Aden). The findings were stark: Yemenis scored the lowest globally in the OECD’s International Network on Financial Education (INFE) 2023 International Survey of Adult Financial Literacy. This highlighted an urgent need for inclusive financial policies and targeted financial education. The survey results are now being used to shape evidencebased interventions to increase access to basic financial services and improve financial capabilities, especially for underserved and vulnerable populations.
Financial Consumer Protection
The project supported CBY-Aden in closing a major regulatory gap by developing and adopting Yemen’s first comprehensive Financial Consumer Protection Framework, aligned with the G20/OECD High-Level Principles. This included drafting and issuing new regulatory instructions and the creation of a dedicated department within the Central Bank responsible for overseeing financial consumer protection. As a result, Yemen’s financial regulatory framework now includes greater coverage for clients of banks, microfinance institutions, and e-money providers. These efforts have significantly improved institutional capacity and are expected to restore consumer confidence in formal financial services.
Domestic Revenue Mobilisation
In the face of a weakened fiscal base, the OECD provided targeted support to help Yemen’s authorities increase domestic revenue mobilisation. This included peer-learning exchanges with tax and customs authorities in Egypt and Saudi Arabia, as well as capacity-building on international taxation, VAT design, customs processes, and audit techniques. These initiatives contributed to the establishment of new training centres by the Yemen Tax Authority (YTA) and Yemen Customs Authority (YCA), alongside the development of comprehensive human resources and reform strategies aimed at modernising tax and customs administration.
Financial Sector Stability
The project delivered strategic advice to help rebuild public trust in Yemen’s financial system and to strengthen the role of banks and licensed money exchangers in financial intermediation. Particular emphasis was placed on enhancing access to credit for Micro, Small and Mediumsized Enterprises (MSMEs), which are vital for job creation and economic recovery. The OECD’s recommendations have already begun shaping national efforts to introduce credit guarantee schemes, support FinTech innovation, and restore correspondent banking relationships. These measures aim to revitalise financial sector confidence and improve economic resilience in a fragile and fragmented context.
Building Yemen’s Statistical System
Reliable data is critical for effective policy design, monitoring, and implementation— especially in fragile and conflict-affected settings. Under the leadership of the OECD’s PARIS21 initiative, the EU-OECD Project has supported the recovery and reform of Yemen’s statistical system. Key actions included a comprehensive national data gap assessment, the establishment of a Statistics Task Force to coordinate data producers and users, and the development of the Statistical Priority Action Plan (SPAP)—a forwardlooking roadmap to rebuild statistical capacity and prioritise economic data collection.
These efforts significantly strengthened institutional coordination, particularly under the Central Statistics Organisation (CSO) in Aden. As a result, Yemen has begun integrating statistical planning into broader development frameworks, including the Yemen Economic Recovery and Reconstruction Plan (YERRP). In parallel, the project supported foundational training programmes that enhanced the skills of Yemeni officials in economic statistics, planning, and governance, laying the groundwork for a more resilient and responsive national data ecosystem.
Tackling Corruption and Money Laundering
Addressing corruption and illicit financial flows is essential to restoring trust in institutions and rebuilding Yemen’s economy. The project conducted targeted risk assessments of corruption and money laundering vulnerabilities, with a particular focus on the energy and banking sectors. These assessments were complemented by a national Anti-Corruption and Business Integrity Dialogue and a Seminar on Anti-Money Laundering and Countering the Financing of Terrorism (AML/ CFT), which brought together public authorities, private sector actors, and international experts.
The impact of these efforts has been tangible. They raised awareness and built consensus among key institutions on the importance of inter-agency cooperation and information sharing. Notably, the Central Bank of Yemen in Aden (CBY-Aden) began implementing risk-based AML supervision, a crucial step toward restoring the reputation of the Yemeni banking sector and reconnecting it with global financial systems.
Empowering the Private Sector
Yemen’s private sector has remained remarkably resilient throughout years of conflict, playing a vital role in providing goods, services, and livelihoods. Recognising the importance of private sector engagement in recovery and reconstruction, the EU-OECD Project placed strong emphasis on fostering constructive dialogue between public and private actors. The project introduced a structured and inclusive “Public-Private Dialogue (PPD) Framework”, adapted to Yemen’s context, that brought together stakeholders from across both sides of the conflict. These dialogues were designed not only to exchange perspectives but also to build trust, encourage collaboration, and jointly identify reform priorities.
The PPD framework has served as a trust-building platform that facilitated consensus on key economic reform areas, allowing public institutions and business actors to co-create solutions to shared challenges. It promoted transparency and inclusion in decision-making processes and laid the foundation for a more stable and coordinated approach to policy development in support of private sector growth.
Through sector-specific consultations, the project achieved meaningful results in three critical areas:
• In the energy sector, it promoted investment in solar energy solutions to address the urgent need for reliable electricity access, crucial for both household resilience and business continuity.
• In terms of investment, the project advocated for simplifying business registration procedures and expanding the use of Public-Private Partnerships (PPPs) to improve infrastructure and services while reducing the risks borne by the state.
• For trade, the project supported the implementation of the Trade Facilitation Agreement and the reactivation of key trade-related committees, helping to enhance Yemen’s regional integration and competitiveness.
Beyond sectoral progress, the PPD framework achieved cross-cutting impact by intentionally promoting inclusive participation. It empowered women-led businesses and young entrepreneurs by ensuring their voices were represented in reform discussions. The dialogues also helped align policy priorities among diverse national actors, fostering greater ownership and sustainability of reform initiatives.
Enhancing Donor Coordination
In a context as complex and fragmented as Yemen, effective coordination among international donors is vital to ensure that aid contributes meaningfully to long-term recovery and stability. The EU-OECD Project has played a key role in strengthening donor coordination by facilitating structured dialogue between major donors, multilateral partners, and Yemeni counterparts. One of the project’s early achievements was to map Yemen’s fragmented aid landscape, identifying overlapping interventions and gaps, and initiating conversations that have led to a more harmonised donor presence.
This work directly contributed to the establishment of the Yemen Partners Group (YPG) and its technical task teams, mechanisms that now serve as strategic platforms for enhanced donor coordination. These structures provide a space for international partners to align their efforts, share information, and define common priorities in line with Yemen’s recovery and development goals.
As a result, donors have increasingly begun to align their programming around shared priorities, with a stronger focus on macroeconomic stability, institutional strengthening, and sustainable development. At the same time, the project has helped to strengthen the capacity of the Internationally Recognised Government (IRG) to engage with donors more effectively. This includes supporting efforts to shape aid flows in a way that is consistent with national priorities and development plans.
Looking ahead, the OECD is now focused on co-designing a unified strategic framework to guide peace and development financing in Yemen. This includes exploring pooled funding mechanisms, improving information-sharing, and aligning development support with broader peacebuilding and state-building objectives. By anchoring donor coordination in an inclusive and forward-looking framework, the project continues to support a more coherent, impactful international response to Yemen’s recovery.
Embedding Reform in the National Agenda
A key achievement of the project has been its direct support to the Yemen Economic Recovery and Reconstruction Plan (YERRP). Drawing on policy analysis, technical expertise, and extensive stakeholder engagement, the OECD provided strategic guidance to help shape the plan’s priorities across fiscal governance, infrastructure, financial inclusion, and institutional development. This included contributing to the identification of reform areas and capacity needs that are now embedded in the YERRP framework. By aligning international support with national strategies, the project has helped strengthen ownership, coherence, and implementation of recovery efforts led by the Internationally Recognised Government of Yemen.
Phase II: Scaling Impact
Building on the foundations and momentum established during the first phase, Phase II of the EU-OECD Project on Promoting Economic Resilience in Yemen is designed to scale up and deepen its impact across strategic areas of reform. The project continues to work closely with Yemeni institutions to build resilient economic systems that are better equipped to support long-term development, stability, and inclusive growth. This next phase retains a strong focus on capacity-building while responding to emerging challenges and opportunities in Yemen’s evolving context.
A central feature of Phase II is the broadening of thematic focus to reflect pressing national priorities. One of these is climate adaptation and green finance, recognising Yemen’s acute vulnerability to climate change and environmental degradation. The project will support institutions in integrating climate risk into economic planning and in developing sustainable finance strategies that can channel resources toward renewable energy, water management, and agricultural resilience. In particular, attention will be given to empowering smallholder farmers, many of whom are women, by promoting equitable access to green technologies and financing tools.
Another major area of expansion is women’s economic empowerment, which is both a moral and economic imperative. The project aims to reduce gender gaps in access to financial services, employment, and leadership by fostering inclusive financial systems and supporting women-led enterprises. This includes gender-sensitive policy development, training programmes, and the use of sexdisaggregated data to better understand and address barriers facing women in Yemen’s economy.
Phase II also places renewed emphasis on gender-responsive financial inclusion, supporting regulatory reforms and awareness campaigns that ensure financial
systems are accessible, affordable, and secure for all segments of the population. The OECD will continue to work with the Central Bank of Yemen and other financial institutions to promote digital finance, strengthen consumer protection, and expand access to transaction accounts, especially for underserved communities.
Beyond thematic priorities, Phase II maintains its core approach of institutional capacity- building— recognising that sustainable recovery in Yemen depends on the strength of its public institutions. Tailored technical assistance, policy dialogue, peer exchanges, and digital knowledge-sharing will continue to be the main tools deployed to build skills, support reform design, and promote coordination between government agencies, private sector actors, and civil society.
The project will expand its engagement with stakeholders involved in governance, anticorruption, taxation, and statistical development. It will continue to support the development of robust legal and regulatory frameworks, improve transparency in public finance, and help Yemeni authorities align economic policies with international standards. Through this holistic and adaptive approach, Phase II positions the EUOECD Project as a key partner in Yemen’s journey toward recovery, peace, and long-term resilience.
Moreover, phase II keeps an emphasis on private sector development by focusing on three key areas: targeted capacity building to strengthen the capacities of business organisations and policy practitioners; public-private dialogues (PPD) at both national and sub-national levels focusing on key economic sectors to outline viable reform initiatives; and women’s economic empowerment.
Lastly, phase II continues to strengthen donor coordination, ensuring that programming remains aligned with the IRG’s priorities and the Economic Recovery Plan.
